These updated Q&As clarify, for example, how exchange-traded derivatives (ETDs) should be reported to trade repositories (TRs). From 12 February 2014, EMIR requires all EU counterparties to a derivative contract to report their trades to a TR, irrespective of whether these are traded on or off exchange. Reporting derivative contracts enables regulators to identify and analyse potential risks associated with derivative markets.

ESMA's Q&As aim to provide guidance to market participants, clarify which firms have to report their ETD contracts to TRs and what information needs to be included in order to ensure consistent data across the EU.

Q&As clarify firms covered, scope and content of reporting

Derivatives traded on EU trading venues are covered by reporting rules under both EMIR and the Markets in Financial Instruments Directive (MiFID). MiFID covers the actual trading of derivatives, whereas EMIR is about post-trading arrangements. ESMA's Q&As are aimed at clarifying counterparties' reporting requirements and at fostering consistency by avoiding reporting conflicts between the two regimes.

According to the legal definitions included in EMIR, any EU counterparty which has concluded a derivative contract is covered by EMIR's reporting obligation. At the same time, conclusion of derivative contracts should be understood as execution of a transaction under MiFID. Accordingly, the following counterparties will have to report their ETD trades to TRs:

Central Clearinghouses (CCPs) clearing the trades;
Clearing members of the CCP clearing the trades;
MiFID investment firms executing derivative trades on a trading venue of which it is a member; and
Counterparties to derivative contracts that do not fall into any of the categories above, except when they are exempt because of their status.

Any of these participants are obliged to report all derivative contracts that they have concluded with any of the other participants. Clearing members and the and their clients need to report separately, whereas firms who are not a counterparty to a derivative contract do not have to report their trades.

Read the Q&A:Download the document now 475.5 kb (PDF File)